ELPEDISON S.A.
ELPEDISON
Utility company active in power generation, energy trade and provider for citizens.
ID: 400189843226-74
Lobbying Activity
11 Apr 2022
The ongoing energy crisis dictates a need to accelerate the renewable energy sources (RES) deployment rate in order to improve the security of supply and affordability. This needs to be realized in a shorter timeframe than originally planned, in the most efficient manner, and with the minimum possible disturbance of the established electricity market mechanisms. Presently, numerous EU Member States provide supportive schemes for RES (feed-in premiums) mainly through competitive out-of-the-market mechanisms (RES auctions). More importantly, several Member States have announced plans to organize such RES auctions in the short- and medium-term. It is widely accepted, that the main RES technologies (solar PV, onshore wind) are presently very competitive in terms of cost per unit of generated electricity and will continue to be so after the end of the energy crisis. In most Member States, such RES generation is cheaper than any other technology. Therefore, it is imperative that supporting schemes are removed and RES systems participate in the market in a competitive manner as merchant RES to further allow a competitive basket for supply to consumers.
Such an approach has obvious advantages as it will allow faster deployment rates. More importantly, it will support a wide application of RES-based power purchase agreements (PPAs) that will provide the final consumer with low-cost electricity, a sine qua non of any action to mitigate the effects of the current energy crisis.
Besides, a prolongation of the RES auctions will result in a dysfunctional, far from the optimal situation because:
- It would send a false market signal. Governments’ support would imply that RES are supposedly profitable only with public support. As a result, developers and financing institutions would prioritize investments in RES that secure supportive mechanisms, independently of other investments that are required to allow a stable system operation
- It would introduce unnecessary distortion into the markets by supporting power plants that are anyhow competitive
- It would delay RES deployment. Investors would wait for future RES auctions to take place before they make their final investment decision which includes the choice between the merchant or publicly-supported RES
- More importantly, it would not allow the formulation of commercial green PPAs that will eventually allow the final consumer to benefit from the comparatively low generation cost of RES
For all the above reasons, we strongly recommend that future supporting schemes are limited only to those RES technologies that have not reached the required market maturity yet. On the contrary, established, market-ready technologies such as onshore wind and utility-scale solar PV systems will be encouraged to capitalize on the available wholesale markets’ opportunities.
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